The US Securities and Exchange Commission's recent legal defeat against Grayscale resulted in a surge of Bitcoin (BTC) to $27,000, but the cryptocurrency has since retraced to $26,000, indicating a decline in bullish sentiment. QCP Capital, a cryptocurrency analysis firm, has offered valuable insights into the market outlook and the implications of this ruling. Bitcoin's Q4: Tumble, ETF Battles, Mt. Gox Drama, and Economic Shivers.
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Bitcoin's Q4: Tumble, ETF Battles, Mt. Gox Drama, and Economic Shivers. BTC’s Short-Term Challenges Persist
QCP has stated that the recent ruling is a positive development for the industry. However, they also believe that it will not have a significant impact on spot prices in the short term. The firm advises against reacting hastily to any immediate price changes and suggests that it may be an opportunity to take advantage of any fluctuations.
It is important to note that the ruling does not guarantee approval for Grayscale's application or the refilling of GBTC. The SEC still has the authority to reject the refilling on new grounds.
QCP Capital is optimistic that the ruling increases the likelihood of eventual approval for a Bitcoin spot exchange-traded fund (ETF), but they believe that the SEC may defer the decision to the March 2023 final deadline.
QCP Capital's wave count analysis suggests that a final push higher to conclude the B wave correction is probable in the coming weeks. This is a cause for concern.
According to QCP Capital, there is a possibility of Bitcoin's price retesting $23,000. This, along with positive developments in the Artificial Intelligence (AI) sector and recent strength in traditional proxies such as Gold and Rates, creates a favorable environment for cryptocurrencies. However, QCP Capital anticipates a potential start near the market lows in Q4 2023 due to fading optimism surrounding the spot ETF and a perceived lack of innovation within the cryptocurrency sector. The upcoming Mt. Gox payout is also expected to exert short-term bearish pressure on the market. Nevertheless, QCP Capital remains optimistic about a significant rally in Q1 of 2024, anticipating the likely approval of the ETF in March, coinciding with the upcoming Bitcoin halving in April, and a potential US economic slowdown in Q2. To capitalize on this outlook, the firm suggests considering a topside end March 2024 option structure, which offers limited loss and the potential for a substantial payout if the bullish scenario unfolds.
Bitcoin Faces Downside Pressure
Material Indicators, a well-known analysis firm, has reported that their algorithmic models, named Trend Precognition, are indicating a downward trend for Bitcoin (BTC) across multiple timeframes.
Based on the analysis from the firm, the Daily, Weekly, and Monthly charts all suggest a possible test of support in the near future. If BTC's price falls and remains below $25,350, the Weekly signal would be considered invalid. However, if the support holds above the lower low (LL) at $24,750, it could potentially serve as a strong foundation for a rally and a retest of resistance. The Daily chart will close in less than 9 hours and the Monthly chart will close in less than 9 hours. The Weekly chart will close in 3 days.
According to both QCP Capital and Material Indicators, Bitcoin's current downtrend is expected to continue in the short term. At present, Bitcoin is trading at $26,100, which is a 3% decline over the past 24 hours. The upcoming days will determine whether the projected scenarios come to fruition or if the cryptocurrency consolidates at its current level and results in sideways price action.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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